Mitch Daniels on Health Care

Republican IN Governor

Medicare 2.0 for the sickest, and for middle and low income

Medicare's unfunded obligations are almost five times larger than Social Security's, more than twice as large as our current national debt. It simply must be changed. The best conceptual way forward is to begin planning for a new future Medicare 2.0,
based on Reconstruction principles. Assure every American up to some high-income threshold that a set amount will await them, money they can then use to purchase health insurance suitable for them. The amount can be adjusted not only for income but also
for health status, so that the sickest or most infirm participants receive the higher amounts they are likely to be charged for insurance. The taxpayer's--actually, in this case, the working-age population's--bill would be knowable and controllable.
The choice of insurance would be entrusted to the citizen. These policies would keep premiums down by restoring the responsibility for routine and first dollar expenses to the patient, while providing secure protection against the most expensive costs.

Obamacare is an existential fiscal crisis; it must be undone

"Obamacare," as it came to be known, not only fundamentally alters the terms of trade in the largest single sector of the American economy (some 18 percent at present, and growing), but also embodies many of the reasons why the
United States is now facing an existential fiscal crisis. It was pushed through with a reckless disregard for the federal government's ability to pay its bills.
Obamacare must be undone and replaced not merely as a matter of sound health policy, not merely because it promises to damage a staggering national economy, not merely because it will hasten the bankruptcy of the
American government. Obamacare must be undone [because] it demeans and diminishes the rights of the free people Americans were intended to be.

HSAs work better than old-fashioned insurance plans

Shortly after inauguration, I directed our personnel department to add the HSA option. With a HSA, the consumer has a personal account from which to pay medical expenses.
In 2006, the first year of availability for Indiana state employees, HSAs were selected by only 4% of us. But over the next few years, the option grew in popularity.
In 2011, 85% of state workers were using them. The results were positive. Medical costs for state employees were at least 11% lower than forecast. HSA plan members were accumulating real savings.
Notably they were accessing preventive care at higher rates than their counterparts in old-fashioned insurance plans.

Healthy Indiana: POWER = personal wellness & responsibility

HIP, [the Healthy Indiana Plan], was our 2006 initiative to bring peace of mind of health insurance to as many low-income Hoosiers as we could. I defined HIP as a partial solution to the approximately 350,000 chronically uninsured.
To pay for the program, I had settled on an increase in the tobacco tax. I devised an acronym to describe the personal accounts that would be at the heart of HIP. They were called POWER accounts which stand for "personal wellness and responsibility."
HIP became law in May 2007. Participants manage a personal POWER account, funded by their own modest premiums, averaging around 3% of AGI with a cap of 4.5%-- and the state's contribution.
The accounts total $1100 per person per year. It offers "health care you can control, at a price you can afford."

INShape plan: insure 130,000 uninsured Hoosiers

Daniels writes, "We have created a medical error reporting system for all hospitals in Indiana. We have created a health insurance plan for the uninsured that we hope to cover 130,000 Hoosiers, without raising taxes or using general fund revenue.
Our INShape plan has received national recognition for its efforts to help Hoosiers lose weight, stop smoking, and adopt other healthy lifestyles. We've invested more than $20 million in funding to encourage our citizens to be more active."

Increase cigarette tax; insurance discounts to non-smokers

Governor Daniels believes it is it vital for Indiana’s economic future to improve the health of our State and lower its high healthcare costs. The high cost of healthcare in the state erects an obstacle to job growth. Governor Daniels’ 2006
Legislative Agenda includes initiatives to encourage Hoosiers to quit smoking by increasing Indiana’s lowest in the Midwest cigarette tax, and allowing employers to offer discounts on health insurance premiums to non-smokers.

Loosen "one-size-fits-all" approach to Medicaid.

Daniels signed Letter to Pres. Obama from 32 Governors

As Governors, we are writing to you regarding the excessive constraints placed on us by healthcare-related federal mandates. One of our biggest concerns continues to be the Maintenance of Effort (MOE) provisions of the Patient Protection and Affordable Care Act, which prevent states from managing their Medicaid programs for their unique Medicaid populations. We ask for your immediate action to remove these MOE requirements so that states are once again granted the flexibility to control their program costs and make necessary budget decisions.

Every Governor, Republican and Democrat, will face unprecedented budget challenges in the coming months. Efforts to regulate state operations impose greater uncertainty on our budgets for oncoming years and create a perfect storm when coupled with the current state of the economy.

Health and education are the primary cost drivers for most state budgets. Medicaid enrollment is up. Revenues are down. States are unable to afford the current Medicaid program, yet our hands are tied by the MOE requirements. The effect of the federal requirements is unconscionable; the federal requirements force Governors to cut other critical state programs, such as education, in order to fund a "one-size-fits-all" approach to Medicaid. Again, we ask you to lift the MOE requirements so that states may make difficult budget decisions in ways that reflect the needs of their residents.